The waiting is the hardest part: When is it the right decision to wait to file for Medicaid?

When someone goes into a nursing home, the bills pile up from many directions. Along with the cost of the facility, there are also expenses from doctors, pharmacies, durable medical equipment providers, and other services. The bills can become overwhelming, and the natural inclination is to file for Medicaid to make the bills stop. However, sometimes applying for Medicaid now is the wrong decision and can have disastrous implications. Depending on the financial situation of the applicant, immediately applying for Medicaid can result in a long wait for coverage.

Nursing home Medicaid is a program funded by the Federal government and administered by the Georgia Department of Community Health to provide benefits to pay for nursing home care for those who have a need for such care. Along with having a need for nursing home level of care an applicant for nursing home Medicaid must also have income and assets under a specified level. The planning for reducing assets to qualify for nursing home Medicaid is complex, and the assistance of an experienced elder law attorney is highly recommended.

The reason that reducing assets for Medicaid eligibility is complex and can result in many issues is that Medicaid offices penalize an applicant for certain gifts made during the five years before the application. Subject to narrow exceptions, gifts cause a penalty that results in the Medicaid applicant being ineligible to receive Medicaid for a certain number of months. The length of the penalty is determined by taking the amount of the gift and dividing by the average cost a month in a nursing home in Georgia, the result is the number of months the applicant must wait before receiving Medicaid. The clock on this waiting period does not start until a Medicaid application is filed. An experienced elder lawyer can provide value in such situations by helping identify transfers that are exempt and using other methods to reduce the waiting period.

Transfers that are made more than five years before the Medicaid application are not required to be reported, and no penalty is assessed for these transactions. In some cases, the proposed transfer is sufficiently large that it will create a penalty period in excess of five years. In such instances, it is better to wait for the five years beyond the transfer to run before applying. In this scenario, care must be taken to avoid submitting an application before the five years has run, or the applicant will face the longer penalty period. The correct timing of transfers, penalties, and application is part of a long term care plan that should be made in consultation with an experienced elder law attorney.